Stocks Get Hit on Eurozone Fears, Fed Commentary
The U.S. stock market fell again on Wednesday in a continuation of a pullback which began on Tuesday when the Fed released minutes from its most recent FOMC meeting. Investors reacted to commentary from the central bank which suggests that another round of quantitative easing is not imminent.
A disappointing Spanish bond auction also weighed on sentiment causing investors' fears over the Eurozone sovereign debt crisis to resurface. The Dow Jones Industrial Average fell around 125 points to close at 13,075. The widely watched blue-chip index traded in a range between 13,020 and 13,198.
The SPDR S&P 500 ETF (NYSE: SPY) fell 0.99% to close at $139.86. Volume was slightly above average with around 147 million SPY shares trading hands compared to a 3-month daily average of 142 million.
The PowerShares QQQ Trust ETF (NASDAQ: QQQ), which tracks the performance of the Nasdaq 100, fell 1.36% to $67.30. After today's sell-off, the QQQ is still up more than 20% for the year.
Crude oil followed stocks lower on the day. NYMEX crude futures, the U.S. benchmark, lost 1.91% to $102.02. Brent contracts shed 1.90% to $122.49. In ETF trading, the United States Oil Fund (NYSE: USO) fell 2.07% to $38.84.
Precious metals were particularly hard hit in the wake of yesterday's Fed minutes. COMEX gold futures lost 3.01% to $1,621.60 while silver futures plunged 5.76% to $31.35. The heavily traded SPDR Gold Trust ETF (NYSE: GLD) registered a decline of 1.70% to close at $157.17.
Treasuries bounced on Wednesday amid the sell-off in risk assets. The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) climbed 1.38% to $112.11. The yield on the 10-Year Note shed 7.6 basis points to 2.22%.
Strength in the U.S. Dollar helped drive the cautious market atmosphere on the day. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, added 0.50% to $22.13. The closely watched EUR/USD pair was last trading at $1.3137.
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